Developing logistic centres Developing logistic centres
in Central Asiain Central Asia
Anthony Pearce
Senior Adviser
Project for development of international logistics centres/nodes network in Central Asia
Why Central Asia?Telecommunications gap corresponds to the regions that
have not been interconnected to global trade
Source: Centre for Strategic International Studies (CSIS), Washington, DC
• Central Asia has some of the world’s highest transport costs.
• Our focus is to improve transport efficiency, reduce costs and improve competitiveness of the region.
Our aim
Project objectives
• Support international trade and facilitate the movements of goods along the TRACECA corridor through improving logistics capabilities, interoperability and multimodal transport
• Improve the efficiency of transport in Central Asia
• Increase role of the private sector in the development of transport infrastructure.
Project benefits
• Logistics centres will complement the
improvements being made to links in the
region’s transport network
• Reduction of transport costs and transit time
• Potential to increase container shipments
between Asia and Europe through Central
Asia routes.
Central Asia logistic links
Project progress
• Sites of the logistic centres have been decided.
• Traffic forecasts, economic and financial feasibility
evaluations have been completed.
• Size and preliminary construction costs of proposed
facilities have been estimated.
• Financing models with variable rates of public/
private contribution towards construction costs are
being prepared.
Typical investment structure
• Mix of financing sources will be required for
attractive financial rate of return for private sector.
• Typical proposed structure:
– 20-30% private equity
– 10%-20% from government
– the rest in the form of debt from local banks and IFIs.
• Financing structure varies between the centres.
Selection of projects
Selection of projects
Aktau, Kazakhstan
• Centre to be located near Aktau port.
• Government developing a Special Economic Zone.
• Forecast traffic growth through logistic centre:
– 2010 – 600,000 tons
– 2020 – 3.3 m tons
– 2030 – 3.9 m tons
Aktau, Kazakhstan
Development costs Return on investment
Bank contribution assumed to be 20% for all private options
Item $ million
Build cost $30.00 m
Warehouse
equipment
$ 1.03 m
Operating costs $1.47 m
Finance loan costs $ 4.15 m
Total costs $ 5.63 m
Year 1 Income $3.24 m
Private
contribution %
of capital costs
FIRR Investment
100% 7.4% $ 31.03 m
10% 35.9% $ 3.10 m
20% 22.4% $ 6.20 m
30% 16.1% $ 9.39m
Osh, Kyrgyz Republic
• Key city of southern Kyrgyz Republic
• Centre for agricultural production in Fergana valley
• International airport
• Railway terminal for southern branch of Kyrgyz rail
network
• Main functions of logistic centre– Inland Container Depot (ICD) and intermodal operations
– Agricultural marketing and logistics
– Import/export clearance
– Storage and bonded storage (particularly for goods from China)
• Cargo projection 400,000 tons in 2021
Osh, Kyrgyz Republic
Item $ million
Build cost $14.31 m
Warehouse equipment $ 1.80 m
Operating costs $ 0.99 m
Finance loan costs $ 2.16 m
Total costs $ 3.15 m
Year 1 Income $ 0.99 m
Bank contribution assumed to be 20% for all private options
Private
contribution %
of capital costs
FIRR Investment
100% 8.6% $ 16.1 m
10% 27.3% $ 1.6 m
20% 19.0% $ 3.2 m
30% 14.8% $ 4.8 m
Development costs Return on investment
Nizhniy Pyanj, Tajikistan
• Traffic volume rising
from 370,000 tons in
2013 to 1.3 m tons in
2030.
• Associated with Special
Economic Zone.
New bridge across river Pyanj to Afghanistan
Nizhniy Pyanj, Tajikistan
Development costs Return on investment
Bank contribution assumed to be 20% for all private options
Item $ million
Build cost $ 7.96 m
Warehouse
equipment
$ 0.77 m
Operating costs $ 0.77 m
Finance loan costs $ 1.17 m
Total costs $ 1.94 m
Year 1 Income $ 1.59 m
Private
Investment
% of Total
Costs
FIRR Investment
100% 3.5% $ 8.73m
10% 41.2 % $ 0.87 m
20% 29.9 % $ 1.75 m
30% 24.2% $ 2.62 m
Turkmenbashi, Turkmenistan
• Forecast traffic of logistic
centre:
– 2015 – 1.3 m tons
– 2020 – 3.7 m tons
– 2030 – 3.9 m tons
• Part of redevelopment of
Turkmenbashi port.
Turkmenbashi, Turkmenistan
Item $ million
Build cost $ 50.0 m
Warehouse equipment $ 1.6 m
Operating costs $ 1.9 m
Finance loan costs $ 6.9 m
Total costs $ 8.7 m
Income $ 5.4 m
Private
Investment
% of Total
Costs
FIRR Investment
100% 9.9% $ 51.68 m
10% 28.6% $ 5.17 m
20% 20.9% $ 10.34 m
30% 16.7% $ 15.50 m
Development costs Return on investment
Bank contribution assumed to be 20% for all private options
Navoi, Uzbekistan
• At the crossroads of international "North-
South" and "East-West" land and air corridors.
Navoi, Uzbekistan
• Korean Air cargo has
150,000 sq m cargo
terminal to handle
100,000 tons a year air
freight rising to 500,000
tons.
• 747-400F Incheon-
Navoi-Milan flights
started in August 2010.
"Korean Air will spare no
effort in supporting the
growth of Navoi into
Central Asia's best
logistics hub."
Navoi, Uzbekistan
• Free Economic Zone with
manufacturing of:
– Electro-technical and
telecommunications
equipment;
– Machinery and computers;
– Pharmaceuticals and
medical ;
– Plastics and polymers.
Navoi, Uzbekistan
• Forecast traffic:
– 2011 – 486,000 tons
– 2020 – 1.04 m tons
– 2030 – 1.20 m tons
• Extensive road (E40),
rail and air connections
Navoi, Uzbekistan
Navoi, Uzbekistan
Item $ million
Build cost $ 7.48 m
Warehouse equipment $ 0.86 m
Operating costs $0.81 m
Finance loan costs $1.2 m
Total costs $ 1.9 m
Income $ 1.2 m
Private
Investment
% of Total
Costs
FIRR Investment
100% 11.5% $8.34 m
10% 39.9% $ 0.83m
20% 26.9% $ 1.67 m
30% 20.9% $ 2.50 m
Development costs Return on investment
Bank contribution assumed to be 20% for all private options
Opportunities for investment
• Network of logistic
centres will produce
real economic benefits
for Central Asia.
• Good opportunities for
profitable investments
in logistic centres
� Aktau
� Navoi
� Nizhniy Pyanj
� Osh
� Turkmenbashi
Thank you for your attention
Благодарю вас за внимание
Anthony Pearce
http://logisticsec.kz/
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